Fresh legal action launched against Coles, Woolworths over claims of misleading discounting

Coles and Woolworths have been slugged with a new class action following allegations by the competition regulator that the supermarkets made false promises to offer best prices for cash-strapped shoppers.

Law firm Gerard Malouf and Partners launched the class action on Thursday aimed to “secure financial redress for Australians who may have been misled by the supposed discounts.”

The firm estimates the payout to individual Australian claimants could be between $200 and over $1300.

“This action focuses solely on winning back the difference between the advertised ‘discounted’ prices and the real prices for hundreds of commonly purchased products at Coles between February 2022 and May 2023, and at Woolworths between September 2021 and May 2023,” it said.

Chair Gerard Malouf said the class action was an essential move toward safeguarding consumer rights and demanding transparency in retail practices across Australia.

Woolworths declined to comment, while Coles pointed to a September 23 ASX statement in response to the competition watchdog’s seismic legal action.

The Australian Competition and Consumer Commission revealed it would haul Coles and Woolworths to the Federal Court for allegedly misleading consumers about “illusory” cut-price offers on hundreds of products — including Tim Tam, Arnott’s Shapes and Colgate toothpaste.

While households grappled with the cost of living crisis, Coles promoted its long-running “Down, Down” campaign as a lifeline for cost-conscious shoppers struggling to make ends meet.

Woolworths did the same with its “Prices Dropped” campaign.

The ACCC estimates the supermarket giants sold tens of millions products at “discounted” price and derived significant revenue from those sales.

ACCC chair Gina Cass-Gottlieb has said the watchdog would seek “significant” penalties on both supermarkets that were “higher than the cost of doing business” if the legal action was successful.